Durable Power of Attorney Form

A Durable Power of Attorney (DPOA) is a document that allows someone you choose (an “agent” or “attorney-in-fact”) to make certain decisions for you or act on your behalf, even if you become incapacitated.

A durable POA remains valid until your death or until you actively revoke it. The critical attribute of this document is that it remains “durable” (enforceable) even if you become mentally or physically incapacitated.

This allows your appointed agent to act on your behalf during those challenging times and will care for your personal and financial affairs or make healthcare decisions if you cannot manage them yourself.

Durable Power of Attorney – By State

Table of Contents

• Durable Power of Attorney - By State
• Durable Power of Attorney - By Type
• What is a Durable Power of Attorney (DPOA)?
• How to Get a Durable Power of Attorney
  • Signing Requirements
• Advantages and Disadvantages
• Frequently Asked Questions

Durable Power of Attorney – By Type

What is a Durable Power of Attorney (DPOA)?

A durable power of attorney is a document you can create, giving another individual the power to act in your place and manage your financial, business, legal, or medical affairs if you cannot do so.

With this document, the person granting or giving the power is called the “principal.” The person receiving the power to act is called the “attorney-in-fact” or “agent.”

It is adequate when you choose when it’s signed or upon your incapacitation. Most significantly, it remains in effect even if you are incapacitated.

The power ends when you pass away or revoke or under the circumstances outlined in the document.

Definition of “Durable”

The term “durable” is defined in Section 102(2) of the UPOAA as:

“Durable,” with respect to a power of attorney, means not terminated by the principal’s incapacity.

One key element of the UPOAA is the default rule regarding durability. Under Section 104 of the UPOAA, a power of attorney is “durable unless it expressly provides that it is terminated by the incapacity of the principal.” That means a power of attorney will be effective beyond the principal’s incapacity.

Tax Implications

It can be used for tax purposes to appoint someone to act on your behalf if you become incompetent or unable to act.

To authorize your DPOA to represent you in front of the IRS and take care of your taxes, you’ll need to fill out IRS Form 2848. This form includes important information such as your Social Security number, the name and mailing address of your representative(s), and a description of the matter(s) for which they are authorized to represent you. [1]

Durable Power of Attorney vs. General Power of Attorney

The difference between a Durable Power of Attorney and a Power of Attorney is that the former remains in effect even if you become incapacitated, while the latter does not.

• A durable power of attorney allows your agent to decide on your behalf even if you become incapacitated. For example, your agent can continue (or start) acting on your behalf if you’re diagnosed with dementia.
• A general power of attorney (non-durable) is no longer adequate if you become mentally incapacitated. For instance, if you have dementia, your agent will lose decision-making power.

The main difference is that DPOA remains effective even if you become mentally incompetent.

At the same time, the latter is only valid if you’re mentally competent.

This means that if you have a standard (non-durable) power of attorney and your mental capacity declines to a point where you are deemed mentally incompetent, a power of attorney expires. Your agent can no longer make decisions for you.

A durable power of attorney is your best bet if you need someone to make decisions for you in the long run.

But if you need someone to sign documents on your behalf for a specific transaction because you don’t want to or cannot appear in person, a non-durable power of attorney is more advisable.

What Rights Does a Durable Power of Attorney Have?

The rights your attorney-in-fact has under a durable power of attorney can vary, depending on your goals.

• Manage finances – You can give the attorney-in-fact the power to manage your finances, including your bank accounts, investments, real estate, and other property.
• Make medical decisions – You can also give the attorney-in-fact the power to manage your medical decisions. Finally, you can provide the attorney-in-fact power to control both aspects.
• Broad or limited powers –You can also give the attorney-in-fact broad or limited capabilities by restricting certain powers.

How to Get a Durable Power of Attorney

Here is everything you need to know:

Step 1 – Designate Your Agent(s)

Your agent can be a trusted family member, a close friend, or an attorney—basically, anyone you know and trust who will be responsible and act in your best interest.

They will have access to your financial information and can make medical decisions on your behalf.

You can name one or more individuals as agents, which can cause delays if the two agents must collaborate but cannot reach a consensus.

It’s also a good idea to designate successor or backup agents if the primary agent cannot act.

Step 2 – Choose What You Authorize Your Agent to Do

Determine and list the areas where you want to give your agent authority.

For the medical power of attorney, you might also want to think about what’s in your best interests, the treatment or medical care you wish to receive, and the medical records you want to share with your agent.

Step 3 – Draft Your Power of Attorney Form

Once you’ve chosen your agent, considering what they are authorized to do and how you will draft your documetn, it’s time to complete the form accordingly.

If you plan to use generic forms with prewritten clauses, ensure you agree with them before you sign your document.

Consider when you want the document to become effective.

The DPOA often becomes effective once the principal signs the document. Still, you can also decide if you want the document to become effective later or upon your mental incapacitation.

Remember to include language that clearly states your intentions that a power of attorney survives your mental incapacitation.

Step 4 – Check Signature and Notary Requirements in Your State

Make sure the form complies with your state’s laws.

Most states require durable power of attorney forms to be signed before a licensed notary public, and some need two witnesses to make it legally binding.

Step 5 – Keep a Copy of the Power of Attorney

It must not be filed with a court or government office to be valid.

However, you must keep a copy of the document with your other estate planning documents and give another copy to your agent or agents.

It’s also a good idea to share with stakeholders like your bank or doctor’s office.

Step 6 – Update the Document As Needed

If your needs and situation change, ensure they are reflected in a power of attorney. It is difficult to override a durable power of attorney after you’ve become incapacitated and will require court proceedings.

Signing Requirements

Some states have special requirements for notarizing a document granting durable power of attorney. It’s always advisable to follow your state’s rules when asked to notarize a signature on a document. You can find state signing requirements for all types of POA here.

Advantages and Disadvantages

Advantages

1. Continuity: Remains in effect even if you become incapacitated. This means that your agent can continue to manage your affairs on your behalf without the need for court involvement.
2. Clear designation of powers: Helps prevent disputes between family members regarding the management of your affairs. By clearly designating an agent and outlining their powers, everyone involved will know who is responsible and what they are authorized to do.
3. Convenience: Avoid the need for a court-appointed guardian or conservator. This can save time, money, and emotional stress for both you and your loved ones.
4. Tailored to your needs: DPOAs can be customized to meet your specific needs. For example, you can grant limited powers for specific purposes or provide broad authority for various decisions.
5. Privacy and control: DPOAs allow you to maintain a level of privacy regarding your personal and financial affairs. You can choose who has access to your information and who will be responsible for managing it.

Disadvantages

1. Difficulty revoking: Once you sign the document, it can be difficult to revoke or modify it. This can be a disadvantage if you change your mind about who you want to act as your agent or if you feel that your agent is not acting in your best interests.
2. Potential for abuse: Granting someone else the authority to make decisions on your behalf opens the possibility of abuse. The appointed agent may act against your best interests or make decisions that you wouldn’t approve of.
3. Lack of oversight: Once you’ve granted power of attorney, there may be limited oversight. Unless someone challenges the agent’s decisions, they may have significant control without regular checks and balances.
4. Financial risk: Granting someone the authority to handle your financial affairs could potentially expose you to financial risk if the agent mismanages your assets or engages in unethical behavior.
5. Dependence on the agent: If you become reliant on your agent for decision-making, you might lose some independence. It’s important to strike a balance and ensure that your wishes are still considered and respected.

Frequently Asked Questions